Music Business

AI in Music: Is the music industry repeating its past mistakes?

[EXCLUSIVE] “The industry needs to adopt a bolder approach to its AI ventures,” writes Christian Ringstad Schultz, the CEO and co-founder of AI-powered music mastering platform Masterchannel. “To do so, it must first recognize that AI is not merely another tool in its arsenal.”

by Christian Ringstad Schultz, CEO and Co-Founder of Masterchannel

The music industry’s ever-growing conundrum with AI seems to be at a standstill right now, as many acknowledge that human creativity and technology can find ways to coexist peacefully.

“Few people are willing to accept that AI may replace some elements of the artistic process”

Recent shifts indicate this evolving stance. Take Universal Music Group’s recent announcement of “an expansive, industry-first strategic relationship concentrated on artificial intelligence” in partnership with BandLab technologies.

But there is a growing sentiment with the industry that suggests that AI merely serves as a tool which artists and producers can utilize at their own discretion; one that can be harnessed and controlled within the existing context of the music industry while human creativity will remain the central pillar of music creation.

This resistance may stem from a comfort with the idea of AI assisting artists rather than completely taking over their roles.

While it might be comforting to think of AI as just a tool, this line of thinking is misleading and provides a false sense of security. If this continues, the industry will inevitably be caught off-guard by the transformative power of advanced AI models.

The truth is this: AI is rapidly advancing. While major tech giants opt for collaboration today, they might offer more efficient, cost-effective alternatives and exclude the industry entirely tomorrow. It’s crucial for the music sector to fully integrate AI now and start thinking like their tech counterparts rather than delaying the inevitable.

This isn’t a doomsday scenario. The industry possesses the means to leverage AI. We are on the brink of significant change – but the industry needs to take the first leap.

Music and technology – a history lesson

Lucas Shaw recently wrote in Bloomberg that “music has been at the frontlines of almost every major change in the consumer internet.” Despite this, the music industry has consistently been slow to anticipate the impact of emerging technologies, often clinging to traditional ways of working.

“protect the good old days”

This reluctance to adapt left the industry vulnerable and scrambling when it faced the onslaughts of piracy in the early 2000s, which it dismissed because it wanted to, as Ernie Smith put it, “protect the good old days- the days in which they could sell their $16 CDs- as much as possible.” The parallels between the challenges posed by piracy and AI are uncanny. The looming question is this: will the industry’s response be different this time?

During the peak of music piracy, the industry missed the chance to introduce its own streaming platforms. Instead, it downplayed its significance, allowing external players to seize the opportunity and revolutionize music consumption. Critically, the industry forgoed the opportunity to establish its own favorable terms. It’s conceivable that consumers might have been amenable to a $100 monthly streaming fee, if the proposition had come from the industry itself. However, platforms like Spotify gained the upper hand quickly, setting industry standards that remain largely unchallenged.

“a transformation in power and revenue dynamics”

It’s important to understand that this wasn’t just a technological shift, but a transformation in power and revenue dynamics. Prior to the arrival of Napster, the music industry was experiencing an all time high, with inflation-adjusted revenue reaching $23.7 billion in 1999, bolstered by CD sales. This golden era, however, experienced a sharp decline as piracy and the advent of streaming services emerged, with revenue hitting a low of  $7.7 billion in 2014. Since then, the industry has surged to a record-breaking $41.5 billion in 2022. To sustain this momentum, it is crucial for the industry to strategically embrace and integrate AI.

The rise and fall of Kodak serves as an important cautionary tale for the music sector. Once a dominant name in photography, Kodak pioneered innovations yet failed to embrace digital photography, despite inventing the first digital camera. This hesitation opened doors for competitors like Sony to surge ahead.

They say history repeats itself, but it’s vital that we learn from recent mistakes to change the industry’s trajectory. The music industry’s approach to new technologies needs a fundamental overhaul. While it may seem dramatic to assert that we’re at a crossroads, the industry fortunately possesses the necessary resources and expertise to navigate the changing landscape. However, this expertise isn’t necessarily coming from industry veterans, but from start-ups and professionals from other industries who now work in music. This new group will play a vital role, and it is crucial to leverage their expertise. 

AI – the economic case

The tech industry is making significant strides in AI-generated music, with YouTube being the latest to unveil an AI feature allowing creators to make videos using the voices of popular recording artists. The Beta release will enable a selected group of artists to grant certain creators the right to utilize their vocal tracks in videos on the platform. However, the launch of the Beta version seems to have been delayed because major music labels have yet to sign on.

While tech giants currently position themselves as willing partners to the music industry, it won’t be long before they can inundate the market with advanced machine-generated tracks, bypassing the entire royalties and rights system. In doing so, they would render traditional music industry gatekeepers obsolete.

“AI is not just another tool – it’s a paradigm shift”

The music sector’s current dilemma with AI primarily revolves around ethical and legal issues, overshadowing the economic and strategic reasons to pivot to the new technology. Although partnerships like those between UMG and AI firms are commendable, the industry must delve deeper to maintain its relevance. It’s imperative to weave AI into core processes, rather than considering it as a ‘nice to have’.

AI is not just another tool – it’s a paradigm shift waiting to happen. Embracing it now can help position traditional music companies as pioneers of the next musical epoch, rather than as entities scrambling to adapt.

To evolve effectively, the music sector must align with the technology adoption lifecycle, positioning itself with innovators and early adopters. This proactive stance will prevent them from being relegated to late adopters or laggards in this rapidly changing landscape.  More specifically, the industry needs to collaborate with companies in this field, and at the same time start acting like them and invest in developing their own AI technology. This dual approach will ensure they are not only adapting to current trends, but also innovating and driving advancements. It may seem risky to rely on new companies with less established track records,  but history shows that these players  are shaping the future for the better.

A hopeful future

The stakes couldn’t be higher for the music industry. Without adaptation, tech corporations may soon dominate, leaving traditional music entities as mere spectators observing from the side lines.

The industry’s historical reluctance to embrace new technologies has often been a stumbling block. However, there are signs this mindset is changing. Companies like Tunecore, owned by Believe, recently collaborated with the company CreateSafe to allow people to distribute songs made with the GrimesAI. Even though some might view this specific campaign as a gimmick, it also showcases how AI voices can be distributed and monetized, which is a major topic across the industry. 

“every entertainment company needs… to become a tech company”

 The industry needs to adopt a bolder approach to its AI ventures. To do so, it must first recognize that AI is not merely another tool in its arsenal. It will result in a profound transformation of how the industry operates but more importantly, it will drive growth. 

In 2023, every entertainment company needs to realize that in order to stay relevant, they need to become a tech company at heart, rather than sporadically adopting technological solutions on an ad-hoc basis.

On an optimistic note, as the CEO of a tech firm within the music industry, I’m witnessing an evolving perspective. I’ve been having engaging discussions with music companies keen to understand AI and the work we do. This curiosity and willingness to learn must become pervasive. If there’s a singular takeaway from this piece, it’s this: embrace AI and remain receptive to its vast potential.

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